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In re: Cray Inc.

The patentee sued the alleged infringer in the Eastern District of Texas. The alleged infringer did not have an office in the district, but allowed two employees to work remotely from their homes located there. The alleged infringer filed a motion to transfer venue, arguing that it did not maintain a regular and established place of business within the district. Setting forth a four-factor test, the district court found that the activities of one of the employees constituted a regular and established place of business “in the modern era,” and denied the motion to transfer. The alleged infringer filed a petition for writ of mandamus.

The Federal Circuit granted the petition and directed transfer, holding that the district court abused its discretion by applying an incorrect standard that was not sufficiently tethered to the patent venue statute. Acknowledging uncertainty in the district courts regarding the scope of a “regular and established place of business” after TC Heartland, the Federal Circuit set forth a three-part test: (1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant. The alleged infringer’s employee’s choice to work from his home in the district did not make it a regular and established place of business of the alleged infringer.